Martin Broughton, the chairman of British Airways and president of the Confederation of British Industry -- the largest British business lobbying group -- spoke in Cabot Hall on Wednesday about the significance of transatlantic relationships in procuring financial stability in a globalized world.
The talk, entitled "Navigating in Dense Fog: Transatlantic Economic Relations," was part of the Charles Francis Adams lecture series.
Given what he called a large amount of "fog" in the international arena, Broughton warned against trusting economists' forecasts.
"The first law is that for every economist, there is an equal and opposite economist; and the second law is that they're both wrong," he said.
In the face of this uncertainty, Broughton issued a call for standardization in the transatlantic economy, which he said accounts for 45 percent of the world's gross domestic product and directly employs eight million people, with another 14 million jobs dependant in some way on the relationship.
Using the example of the auto industry, he questioned the purpose of competing guidelines and highlighted the need to break down barriers to trade and cooperation.
"Why do we have two completely different [sets of] auto-safety standards? Just mutual recognition of those safety standards would eliminate a huge amount of cost," he said. "There are a number of ways to make this relationship more efficient."
According to Broughton, who recently met with British Prime Minister Gordon Brown about next month's Group of 20 (G-20) meeting, the first step is to "halt the freefall in demand."
In order to do that, Broughton said that countries need to look beyond their own individual interests and focus on the entirety of the global market.
"Everybody is doing what is naturally the right thing to do [individually] but collectively is not," he said. "We need to produce a stimulus plan. Generally speaking, I'd say we're talking more about stimulus from the big countries."
Broughton called for more aggressive efforts to secure financial stability.
"Trade finance is falling off the cliff, which is part of this freefall ... The World Bank should be putting money in the export credit agencies," he said. "We need to tackle some of the pro-cyclical issues that are around."
Broughton also underscored the need for less protectionism.
"There is a very strong statement that came out of the G-20 report in Washington to reject protectionism of all kinds," he said. He argued, though, that the bulk of G-20 countries have not paid attention.
As such, he called on involved countries to overcome the roadblocks that have stalled the World Trade Organization's Doha Development Round, negotiations that look to lower trade barriers. Broughton said that these talks could provide for another $150 billion in trade -- 70 percent of which would likely move toward Asian markets.
Broughton also addressed the issue of climate change in response to a question from the audience, calling President Barack Obama's cap-and-trade program a "huge breakthrough," but cautioning against poor implementation.
"I see a lot of opportunity for cohesion now," he said. "I also see opportunity for confusion. Obama has taken a much more enlightened approach to a cap-and-trade emissions trading scheme. My fear is that we will finish up with differing schemes between America and Europe."
Finally, Broughton argued that the international economic community needs to address the issue of poverty.
"Five-hundred million people have been taken out of poverty over the last 15 years by the strength of globalization. The world has dramatically moved forward," he said. But he issued a stark warning: "Now there's a risk of 100 million of those going back into poverty."
At the conclusion of his lecture, Broughton showed a video of a commercial airplane unable to land in extreme wind, noting the parallel between the current economic situation and the struggling aircraft.
"I'm part of the generation that's leaving you this mess," he said. "You've got all of the good that's coming out of it, but you've also got to clean up this mess."
